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Why the WWE Network is Failing and How to Fix It

The WWE did not
try to grow their customer base, they tried to squeeze it.

It is not
working.

I’ve lived
through this before in a previous job. I was working for a technology company
and our subscriber base was stagnant and fickle. They bought our products only
when they desperately needed them. This meant that our sales numbers went up
and down despite any of our best marketing efforts. Finally, after they kept
going down, our investors decided we needed to change.

We needed to
provide steady numbers each quarter. To do this, we tried to switch from a
single-purchase model to a subscription model. It did not work. People didn’t
want to pay us every month. People want to pay us one and leave.

It didn’t work
for that company either.

I was routinely
criticized for a post I wrote on the WWE Network because I saw exactly what the
WWE was trying to do because I had lived it. I’d seen it fail.

“The ones that will be drawn to the network…are the
hardcore fans that buy multiple pay-per-views per year. The WWE, in a bizarre
move, is actually submarining their own revenue in an effort to show off their
shiny new toy.

It’s a corporate move as old as time. Revenue will
go down from pay-per-views but the WWE will point to the subscriber numbers as
if that will appease investors. If you’ve ever been in a conference room with
investors, you’ve seen this charade play out.”

From a business
point of view, the WWE Network was not changing the financials of the WWE’s
bottom line. They were trading pay-per-view revenue for WWE Network revenue.
The goal, however, was to have a steady stream of revenue coming in each month
as opposed to large spikes around WrestleMania and SummerSlam, while months
like October cratered with few pay-per-views.

In the lead-up to
the Network’s launch, everyone could not stop heaping praise
upon Vince McMahon. This was hailed a victory for cord-cutters and the future
of content distribution. This was going to increase WWE profits. Millions
upon millions would sign up because they longer had to deal with Comcast or
Time Warner. They could access great wrestling whenever they wanted.

Some folks even
went to absurd extremes, with analysts claiming the WWE Network could hit 2 or
4 million subscribers by the end of the year and easily hit 8
million in the four years.

The problem with
this thinking is that the WWE Network was not offering the average WWE fan
anything new – the 14 year old with zero interest in WrestleMania 8 – they were
just providing it in a different form.

Guess what?
People weren’t buying WWE pay-per-views because they
weren’t interested in them. It had nothing to do with price or content
distribution – they did not like the product.

In the wake of
the first subscriber count for the WWE Network, the stock plummeted, down to just over $17 as I write
this from a high of $31. The subscriber count of 667,000 was far short of the 1
million mark, which the WWE needs to break even, and the Network’s VP of
Programming, Matt Singerman, was canned after being hired only in November.

This is the part
where I explain the problem with the WWE Network. And it has nothing to do with
the WWE Network.

If you’re a pro
wrestling fan, the Network is practically heaven, as I can attest to taking
advantage of two one-week trials. There is every pay-per-view ever aired in
one place whenever I watch. More classic television shows are being added. More
original shows are being added, looking back at old WrestleMania matches for
example.

This is all well
and good but the audience for classic wrestling is miniscule. The WWE’s last
attempt at mining gold from that well – WWE Classics on
Demand – topped out at 300,000 subscribers.

For the WWE
Network to work on the scale necessary – the WWE has lost $20 million in six
months largely due to costs associated with getting it launched – it needs
people to buy it in mass numbers. The draw of the Network, and its success,
will be based on the monthly pay-per-views.

Nothing has
changed except the delivery method.

The scariest
number – by far – for the WWE is the 400,000
people that bought WrestleMania. They did not buy the Network. Those are
the people, like the customers at my previous job, that have zero interest in
the WWE beyond that one show a year. Even though that $60 would have gotten
them five other pay-per-views and 14,000+ hours of wrestling, they decided
against it.

The WWE can put
up literally every single wrestling match that has ever taken place and it
wouldn’t matter. They need to get people to care about the matches that haven’t
happened yet.

Pro wrestling
exists through boom periods and down cycles. Stone Cold Steve Austin doesn’t
happen if the WWF isn’t on the verge of bankruptcy. John Cena doesn’t ascend in
2004 if Triple H doesn’t drag everything down in 2003.

The WWE has a core of about 3.5
to 4 million people that watch Raw every week. They didn’t change anything
about the product and expected that core group to simply hand over more money. It
is worth noting that very few of those fans bought any shows other than WrestleMania
in 2013. A year of the Network is asking them to double that.

It reminds me of
SEO firms – snake oil salesmen – that try to game the system. You know what
makes the best SEO? The best content. If people want to read your stuff, it’ll
be linked to, it’ll be shared and it’ll be bumped up the rankings.

The WWE, right
now, is not providing the best content. The next WWE Network special is
expected to have the exact same top three matches that its last special had.
Why would you pay for that?

The pay-per-view
market was drying up for the WWE and they blamed the content distribution
model. That was false. UFC and Floyd
Mayweather have proven time and time again that fans will pay for good
content, regardless of the model.

he didn't. he just pointed out that the rumored card for the next ppv has the same card as "Extreme Rules".

and not only that, at that ppv, we have seen The Shield and Bryan go over clean ("clean" at least in the context of those matches) and Cena dominating all three Wyatts (after he had already pinned Bray at WrestleMania) - how does that sound like an event which people would pay a lot of money for? (and that's what it SHOULD sound like. if people have no regret on "missing out" current ppvs, it is one less argument for subscribing to the WWE Network).

While I agree on the whole with you, I think the failure to mention both the US only nature of the service and its distribution platforms tempers the argument a bit. Beyond the natural bump they will get when the Network goes live overseas, you have to realize that obviously the "core" audience that watches Raw has cable, but may not have a PS3/X-Box/streaming device in their household and has no desire (or no means) to buy one on top of the $120 a year commitment. Once the network is available by slightly less laborious means (as in, on Smart TVs), that might help.